THE New Zealand Dollar began trading at around 1.8365 to the British Pound last Monday and around 1.1835 against the US Dollar. The Pound weakened against most of its counterparts during the past trading week to end at 1.8275 to the Pound. The US Dollar however strengthened against the Kiwi to close the week at 1.1978. The Kiwi opened stronger on Tuesday morning at 1.8036 to the Pound and 1.1927 to the US Dollar.

It all seems to be happening in Britain at the moment. Moody’s Investors Service has downgraded the UK’s top credit rating from its AAA status. This is mainly due to the dismal nation’s growth outlook, gross debt to GDP ratio and limping economy. Many investors are not surprise by this move after the US and France’s downgrade in recent history. The market still seems to be factoring in this news and trying to find a new stable level.

The Japanese Yen still seems to be causing small waves in the market as Prime Minister Shinzo Abe is looking to appoint a new governor of the Bank of Japan. The Yen has weakened to a low point of 78.268 NZD/JPY on Tuesday.

Today will see the US federal chief delivering his biannual address on the Monetary Policy to the Senate Banking Committee. The minutes of the last Federal Open Market Committee showed that several members would like the Central Bank to vary its pace with regard to asset purchases. Some investors are speculating around the chances of the Fed curbing the current stimulus policies.

The local front is rather quiet and the Kiwi will take direction from outside its borders this week.

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